Date archives
May 2016

Top Rank Sued By Showtime Over Legal Fees Resulting From Pacquiao’s Shoulder Injury

According to a lawsuit filed by Showtime against Top Rank, Top Rank owes Showtime $700,000 in legal fees. The legal fees were accrued during Showtime protecting itself from a lawsuit filed by purchases of the Mayweather-Pacquiao PPV event. Showtime claims that there was an indemnification agreement between them and Top Rank.

Bob Arum, who runs Top Rank, claims that Showtime is “not entitled to indemnification” and expects the case to go in front of a judge who will then determine a ruling based on the wording in the contract.

After Pacquiao said that he had suffered a shoulder injury, something he had failed to report on the pre-fight medical forms, people who had purchased the PPV sued Showtime, HBO, Top Rank, and Mayweather Promotions arguing that they would not have purchased the fight if they had known Manny Pacquiao had an injury that would seriously impair Pacquiao’s ability to win.

Showtime was dismissed from the lawsuit.

Ringside Analysis:

This fight has been firmly in the boxing scene for the last seven years now. I’m surprised that the language in the contract isn’t extremely clear given the number of lawyers that had to have looked at this in the lead up to the big fight.

Many people have said that Bob Arum has been difficult to do business with and on face value it looks like this situation is an extension of that. It is probable that this case will be settled before it gets in front of a judge and that the lawsuit was to speed along the process of getting to a resolution.

MMA Making Debut In Thailand After Being Blocked To Protect Muay Thai

At the time of this publishing the first MMA fight in Thailand will be taking place in Bangkok’s Impact Arena starring a “local legend” fighter named Dejdamrong Sor Amnuaysirichoke. One Championship, based out of Singapore, is promoting the event. It sounds that the financial revenue that would result from the event was too large to keep MMA unofficially out of the country.

Top Muay Thai athletes can earn up to $5,700 for a fight while some athletes for One Championship can earn hundreds of thousands of dollars, according to the NYT article.

In Thailand the older members of society were concerned about MMA, not just it’s possible infringement into the connection between the culture and Muay Thai, but also because of the perceived barbarism involved. The concerns echo those of former Senator John McCain who likened MMA to “human cockfighting.”

Currently there are only plans for two Muay Thai fights a year that the chairman of One Championship, Chatri Sityotdong, doesn’t expect to impact the Muay Thai culture in Thailand. Also according to the NYT article, Chatri who used to fight in Muay Thai but now teaches MMA now believes that MMA will only help promote Muay Thai internationally because of how essential the style is to the sport of MMA.

Part of the struggle has been due to how traditional eastern markets can be. Some traditions go back centuries and fighting styles are highly entrenched in the culture. It doesn’t come as a surprise that there was a concerted, community effort to fight off a new sport that could overshadow the original sport in the country.

Maybe in the internet age and natural globalization MMA will begin to wedge further into traditional markets.

UFC 198 was the third most attended UFC show with 45,000 fans packing Arena da Baixada in Curitiba, Parana, Brazil, and the event itself injected $12.6 million into the Brazilian Market.

The economic impact ofRock in Rio, a music festival rooted in Rio de Janeiro, was surpassed by UFC 198.

Given that most of the source articles are in Portugese I’ll rely on the translated works by MMA Junkie referencing the Brazilian article:

This number accounts for both direct economic impact – money spent by tourists on hotels, food, transportation and shopping – and indirect effects, such as distributors. According to the research, coordinated by professor Jose Manoal Gandara, of the Federal University of Parana’s Tourism Department, 43 percent of fans in attendance were outsiders.

As reported by Gazeta do Povo, the numbers are positive when stacked against other major events. Studies conducted using similar methodology showed that, comparatively, the Curitiba visitors spent almost as much as soccer World Cup tourists spent in Rio de Janeiro (around $117 for Brazilians and $201 for foreigners) and more than two times more than those who visited Rio to watch the Rock in Rio mega festival in 2013 ($43 and $70.50).

Ringside Analysis:

Economic impact studies can be very tricky. First, many people going to events already live in the area so there isn’t necessarily a fresh source of revenue coming in from out of town. Second, sports and entertainment falls under luxury expenditures that result from a surplus of money for an individual. It could be argued that people simply diverted their money away from events such as concerts, movies, and other restaurants in the city and moved them towards the UFC event.

That being said this is another example of the UFC putting a lot of money into another international city, just like in Melbourne with UFC 193. The UFC can still call the now T-Mobile Arena in Las Vegas their home for the biggest fights but the trend of a real economic impact in foreign cities bodes well for possible better partnerships with cities.

ESPN was the recipient of a one-on-one interview where McGregor discusses his feud with Dana White and the UFC, a possible fight with Mayweather, and his return to the UFC.

McGregor argues that the UFC had unreasonable expectations of media responsibilities and McGregor pushed back saying that he needed to focus on training but would only do a “reasonable” amount of media.

On his complaint with the UFC:

That’s how it all came about. I just wanted to focus and I was deep in the process, and especially at that particular moment, I just wanted a little bit more time. I didn’t shut it off completely. Reasonable media, is what I said. I said I would do New York. I said I would do everything else after that. I just needed another little bit to set myself, and then the lack of communication, they weren’t having it. They were trying to push back on me, I was trying to push back on them, and look, it blew up then.

On his retirement:

I’ll tell you what, it blew up. I was just kind of having fun at the start. It was kind of half-hearted, and then it just went [crazy], and now all of a sudden you’re off UFC 200, and I was like, ‘alright, well f*ck you too then.’ It was fun. Seeing it all blow up like that, it was amusing for a while.

There were times when I was … seeing the press conferences take place, and I was like, ah, I should’ve just jumped on the damn flight. I should’ve just stuck it out and went with it. But sometimes you’ve gotta do what’s right for you, and not do what’s right for everybody else – and especially if you’ve done what’s right for everybody else a million times over, you should have the right to be able to do what’s right for you sometimes. That’s what I felt.

Ringside Analysis:

The dispute overmedia obligations has already been identified as the central issue. Dana White at the UFC 200 press conference that McGregor didn’t show up for said that commitments such as attending the press conference, creating assets for promotional purposes, and getting footage for the commercial is necessary for a fighter to participate on the fight card.

There is a gap between the few responsibilities that Dana White listed and the “unreasonable” obligations McGregor said that needed to happen that would have put him on a plane for 40 hours and doing tens of interviews that he didn’t feel were necessary.

I would expect that contracts have specific language about a fighter’s obligations to promote the fight and meet media requirements. If the language is ambiguous it will be very explicit in the immediate future.

McGregor said that Mayweather needs him more than he needs Mayweather, which many in the fight game can agree is ludicrous but is in line with his branding and I’m sure he 100% believes it.

McGregor and the UFC still seem to be at odds and now the UFC seems to be having trouble scheduling anything with the fighter that submitted Conor McGregor, Nate Diaz. Time will tell if Conor McGregor can get out of fight purgatory and if a rematch even happens.

Top Rank’s Bob Arum has settled his lawsuit with Al Haymon and the Premier Boxing Champions (PBC). Last Wednesday the two parties came to a settlement that will remain confidential as written in the settlement and the case has been dismissed.

Bob Arum sued Al Haymon in July of 2015 arguing that the PBC violated the Muhammad Ali act, California State Business Regulations, and violated antitrust laws by being monopolistic.

Golden Boy Promotions is also suing the PBC but in a separate lawsuit, which is in discovery. Discovery would lead to financial information being opened as well as trade secrets.

Ringside Analysis:

It is not a secret that the PBC has been losing money but the company has already invest at least $500 million into the venture with the help of Waddell & Reed, a Kansas based investment firm.

With this lawsuit coming to a close I expect the case with Golden Boy Promotions to be settled soon. By settling the case can’t get in front of a court, which could result in a terrible loss for the company.

Industry sources have said that the PPV program featuring Jon Jones return to the octagon against Ovince Saint Preux to garnered 375,000-450,000 PPV buys. The UFC, a private company, has no obligation to report the numbers and they most likely never will.

Jon Jones was originally scheduled to fight Daniel Cormier in a rematch. Jones was away from MMA for 17 months. Cormier was injured before the fight and was replaced by Saint Preux on short notice.

Conor McGregor, Ronda Rousey, and Jon Jones are considered to be the top PPV draws for the company.

Ringside Analysis:

These PPV numbers illustrate how much popular Rousey and McGregor are compared to everyone else. McGregor and Rousey create nearly, or exceed, 1 million buys.

The down PPV numbers for a top attraction is most likely a result of Cormier being injured and Ovince Saint Preux stepping in. It is likely that most casual sports fans do not know who Saint Preux is, thus reducing the likelihood that they will pay money for a program.

Jon Jones will fight Daniel Cormier as the main event at UFC 200. UFC 200 has been a program that is constantly being saved from injuries and key fighters losing. The UFC must be really banking on 200 getting more than 1 million PPV buys given the significance of the number. UFC 100 received 1.6 million PPV buys and is still the most successful PPV program the UFC has put out.

Monster Energy has renewed a partnership with Bellator MMA to remain the official energy drink of Bellator.

The biggest proclamation that Monster has made with Bellator, and the UFC, is the ability to put the Monster “M” in the middle of the octagon. There are also other forms of activation and promoting other programs sponsored by Monster called the “Monster Energy Cup.”

Monster will continue to own highly visible inventory inside the Bellator cage and sponsor concourse activations during events as well as additional off-site promotional activations. To complement the live event experience, Monster and Bellator will look to engage in a multi-faceted activation plan intended to build customer loyalty and drive tune-in of the Bellator broadcasts on Spike. The sponsorship extension will also see Bellator MMA continue to put on fights during the “Monster Energy Cup” – an event that showcases the world’s top supercross riders in a head to-head battle for the coveted “Monster Energy Cup” award and the chance to win one million dollars.

“Monster Energy is the ultimate lifestyle brand that puts its fans first – which aligns perfectly with our philosophy at Bellator,” said Bellator President Scott Coker. “They are an ideal partner and we look forward to continuing to link our high-energy action-packed events with their world-class product.”

In 2015, Monster Energy signed a multi-year agreement to be the official energy drink sponsor of the UFC, which was valued at $7 million. Monster Energy also sponsors Ronda Rousey, Conor McGregor, Anthony Pettis, and Johny Hendricks.

Ringside Analysis:

Monster Energy is all in on MMA by buying the energy drink category in the two biggest MMA companies. With television and sports being so segmented it has never been more important for companies to pick their most dedicated target market and to buy as much marketing placement and promotions possible. For example, Dr. Pepper and Chik-Fil-A are fully committed to college football by buying advertising slots and brand activation on tv programming. In the NBA, Kia has taken the official sponsorship for beverage and in doing so have placed their cars in the NBA Dunk contest, buying advertising spots during games and other tv programming, and sponsoring athletes as well as including them in Kia commercials.

Also of note, Bellator President Scott Coker emphasized that, like Monster, Bellator puts the consumer and athletes first, which is why Bellator still allows fighters in their program to get their own sponsors for their fight apparel.

UFC flyweight champion Demetrius Johnson has signed a new contract with the UFC without entering into free agency. There were two fights left on Johnson’s contract before the new contract.

Johnson defeated Henry Cejudo at UFC 197 putting him at eight straight successful title defenses, just two short of Anderson Silva’s record.

On the MMA Hour Johnson said:

I think when fighters do that, they want to see what they’re worth, but at the same time, if they negotiate with the UFC, and they get what they like, there’s no point going and testing free agency. And the thing is, even Rampage Jackson said it before, nobody treats you better than the UFC.

Ringside Analysis:

This type of re-signing is similar to restricted free agency where an athlete can re-sign with a team without interference of other offers. If the athlete believes the contract to be fair then he can agree to it without even bothering to go through the free agency process.

For some reason Johnson has never turned into a PPV star. Demetrius Johnson has been one of the best fighters in the UFC’s young history. He has been the champion for as long as the flyweight division has been part of the company. His dominance over the division and dominance over every opponent he’s faced have resulted in less entertaining fights and a certain amount of boredom around the division as a whole.

Johnson discusses a conversation he had with Lorenzo Fertitta and Dana White were they believed that if Johnson had more competition, or at the least the appearance of competition then he might become more popular. White points out that Silva didn’t make the jump to super stardom until he fought Chael Sonnen twice in tough fights.

Cris “Cyborg” Justino knocked out Leslie Smith in 81 seconds at UFC 198. The fight at UFC 198 was in front of her home crowd in Brazil. Cyborg is the Invicta Champion at 145 pounds but fought at a catch-weight against Smith at 140 pounds.

After the fight Cyborg said:

I’m the Invicta champion and I want to defend my belt. I also want to fight at a catchweight in the UFC. But I’m the champion.

Tonight I feel great. Yesterday, I made 140. I feel good. I think maybe I can make catchweights or defend my belt at 145.

After Cyborg’s win Miesha Tate, current bantamweight champion, congratulated Cyborg on weighing in at 139 pounds and said that if Cyborg dropped four more pounds Tate would fight her for the title. Cyborg responded saying that she already has a world title.

The UFC currently does not have a featherweight division that Cyborg could compete in.

Ringside Analysis:

It seems very unlikely that Cris Cyborg will drop to the 135-pound limit to get into the loaded woman’s bantamweight division in the UFC with Miesha Tate, Holly Holm, and Ronda Rousey. Tate challenged Cyborg at 135 but Cyborg immediately dismissed it on Twitter. Based on Cyborg’s post fight comments and history on the topic of making 135 pounds it appears that Cyborg doesn’t feel that she could physically get that low in weight.

In order for Cyborg to take on a fighter like Tate, Holm, or Rousey, the fight would need to be at a catch-weight. Given that Cyborg has been debateably the best fighter in women’s MMA for years the topic of weight could be used by any top fighters in the bantamweight division from fighting her. However, if one fighter out of Holm, Tate, and Rousey take on Cyborg at 140 pounds then the others will most likely have to end up fighting Cyborg at the catch-weight.

Oscar De La Hoya, the CEO of Golden Boy Promotions, told Dan Rafael that the Canelo-Khan PPV garnered around 600,000 PPV buys, according to Dan Rafael at ESPN.

Previously, HBO didn’t release numbers claiming that it was up to the promotion to release the numbers, which led to speculation that the PPV numbers for the program were awful. Rick Glaser claimed that the PPV numbers were only 332,000.

Alvarez PPV History:

The fight was Alvarez’s fifth as a pay-per-view headliner. He also headlined against Cotto; against Mayweather in a 2013 loss that sold 2.2 million pay-per-views, third all time, and set the pay-per-view revenue record of $150 million until it was broken last year by Mayweather-Pacquiao. Alvarez also headlined against Erislandy Lara and Alfredo Angulo in 2014, each of which generated more than 300,000 buys apiece.

PPV numbers of other “top fights”:

Alvarez’s middleweight title victory against Miguel Cotto in November generated 900,000 buys. Manny Pacquiao’s supposed farewell fight against Timothy Bradley Jr. on April 9 and Floyd Mayweather’s supposed farewell against Andre Berto in September both generated in the range of 400,000 to 450,000 buys.

Ringside Analysis:

The originally reported numbers seemed surprisingly low for someone who had done good PPV numbers in the past. Khan has an avid built-in fan base that helps boost numbers and created the dynamic of a speed against power fight.

With 600,000 PPV buys there is more merit to Canelo Alvarez being the PPV star that everyone thinks he will become. Canelo has said that he will fight GGG at 160 pounds, which would be the most lucrative fight in the sport.